Health Care Debate

[_JohnStuartMill]

I don't see how a reduction in health care costs is a reductio ad absurdum.

An important element in health care inflation is the care which has little or no cost to the individual. Medicare/medicaid costs increased much faster than predicted.

"[C]are which has little or no cost to the individual," inasmuch as it is a problem at all, is not a problem unique to government health insurance. Private insurance often features low deductibles. And when it doesn't, is that really such a good thing?

The two primary lessons of Medicare are the chronic problem of woefully underestimating program costs and the impossibility of genuine cost control. A closer look at Medicare shows why these two problems are certain to plague a government-administered universal health-care plan.

The cost of Medicare is a good place to begin. At its start, in 1966, Medicare cost $3 billion. The House Ways and Means Committee estimated that Medicare would cost only about $ 12 billion by 1990 (a figure that included an allowance for inflation). This was a supposedly "conservative" estimate. But in 1990 Medicare actually cost $107 billion.

Is this because per capita costs of Medicare have gone up astronomically, or is it because lawmakers in 1966 didn't anticipate the lengthening of life expectancy that led Medicare to enroll many more Americans? If the 1966 House thought that in 1990, Medicare would cover 10 million Americans, and it instead covered 50 million, then the increase in cost is not so surprising. So saying that Medicare's total costs increased by more than expected doesn't really get you anywhere.

Also, I can't figure out why you're touting the "conservative" estimate for Medicare costs. A "conservative" estimate is one that's on the low end of the range of estimated values, so we shouldn't throw up our hands when the actual costs are more than the conservative estimate.

But you're missing the most important point, which is: how does the increase in the cost of Medicare, per capita, compare with the increase in the cost of a typical private health insurance plan? Those comparisons aren't favorable to your position.

Subsiding an activity results in more of it. Taxing an activity results in less of it (or more cheating). Giving away health care increases the demand for it.

Yes, subsidizing an activity usually results in more of it. But moral hazard exists in all insurance schemes, not just those run by the government. It's inherent in insurance, period.

Taxing an activity doesn't necessarily result in less of it. If the government starts taxing your employment income at a higher rate, you might work more or you might work less, depending on whether the income or the substitution effect is greater. Economics, bro.

Controlling costs then requires rationing.

Yes, which is why private health insurers, who must control costs in order to make money, also ration.

Liberals are pro-choice on abortion. I guess that's the only aspect of health care in which choice is allowed.

I think grandpa needs a nap.

[_JohnStuartMill]

surely you recognize the absurdity in suggesting Canada, UK, Germany, Isreal, etc. are commie-lands.

No, he doesn't. He's an undereducated Intermountain West mouthbreather.

And stop calling him "Shirley".

[_bcspace]

Milton Friedman - Government's Health Care Role

As true today as it was then. Check out 1:01 and 2:40.

[_bcspace]

They do. But even now, no one is denied access and you can switch plans if you don't like your current one (or you can also chnage your lifestyle).

If you can't afford it, you are denied access. This might be good or bad, but it's misleading in the context of comparing how things are rationed out.

It's not misleading at all. All UHC systems deny coverage as well. Not only that, they deny access. I was actually on Medicaid when I was in college and had a family and was denied coverage. The differences are that something can always be done in a free market system whereas under government control, you're stuck and you have many more cases of such.

[_JohnStuartMill]

Milton Friedman - Government's Health Care Role

As true today as it was then. Check out 1:01 and 2:40.

Boring. I could cite the opinions of other Nobel laureates to "prove" the contrary.

Friedman doesn't really address the best arguments in favor of voluntary government provision of health insurance. For example, he doesn't address adverse selection at all, which is a huge detriment to his argument.

Also, his figures are 20-30 years out of date. Health care costs have exploded since he gave this speech.

[_JohnStuartMill]

If you can't afford it, you are denied access. This might be good or bad, but it's misleading in the context of comparing how things are rationed out.

It's not misleading at all. All UHC systems deny coverage as well. Not only that, they deny access. I was actually on Medicaid when I was in college and had a family and was denied coverage.

But the point of a public option is that there aren't restrictions on who can purchase it, like there are with Medicaid.

The differences are that something can always be done in a free market system whereas under government control, you're stuck and you have many more cases of such.

~A, where A is the proposition "something can always be done in a free market system."

[_richardMdBorn]

My new comments are in bold

JSM I don't see how a reduction in health care costs is a reductio ad absurdum.

RMB An important element in health care inflation is the care which has little or no cost to the individual. Medicare/medicaid costs increased much faster than predicted.

JSM "[C]are which has little or no cost to the individual," inasmuch as it is a problem at all, is not a problem unique to government health insurance. Private insurance often features low deductibles. And when it doesn't, is that really such a good thing?

RMB If the costs are not felt by the user, the demand is higher than if he/she pays it. Obamacare will make this worse.

Quote cited by RMB The two primary lessons of Medicare are the chronic problem of woefully underestimating program costs and the impossibility of genuine cost control. A closer look at Medicare shows why these two problems are certain to plague a government-administered universal health-care plan.

The cost of Medicare is a good place to begin. At its start, in 1966, Medicare cost $3 billion. The House Ways and Means Committee estimated that Medicare would cost only about $ 12 billion by 1990 (a figure that included an allowance for inflation). This was a supposedly "conservative" estimate. But in 1990 Medicare actually cost $107 billion.

JSM Is this because per capita costs of Medicare have gone up astronomically, or is it because lawmakers in 1966 didn't anticipate the lengthening of life expectancy that led Medicare to enroll many more Americans? If the 1966 House thought that in 1990, Medicare would cover 10 million Americans, and it instead covered 50 million, then the increase in cost is not so surprising. So saying that Medicare's total costs increased by more than expected doesn't really get you anywhere.

RMB Utilization was much greater than the estimate. You give something away and the demand often exceeds expectations. Especially when the cost is nine times what was expected. Guess what, the cost of Obamacare will exceed the estimate and liberals will be SHOCKED SHOCKED.

JSM Also, I can't figure out why you're touting the "conservative" estimate for Medicare costs. A "conservative" estimate is one that's on the low end of the range of estimated values, so we shouldn't throw up our hands when the actual costs are more than the conservative estimate.

RMB A conservative estimate is one at the high end of the cost estimates. I’m the chief actuary at a multi-billion dollar asset company and that’s how we use the term.

JSM But you're missing the most important point, which is: how does the increase in the cost of Medicare, per capita, compare with the increase in the cost of a typical private health insurance plan? Those comparisons aren't favorable to your position.

RMB Medicare is being subsidized by private insurance as its reimbursement rates have decreased. Obama’s brilliant solution is to kill private insurance. Where will the subsidy for Medicare come from when private insurance is no more.

RMB Subsiding an activity results in more of it. Taxing an activity results in less of it (or more cheating). Giving away health care increases the demand for it.

JSM Yes, subsidizing an activity usually results in more of it. But moral hazard exists in all insurance schemes, not just those run by the government. It's inherent in insurance, period.

RMB Yes, but private insurance companies don’t have printing presses. Subsidies from the government make it worse.

JSM Taxing an activity doesn't necessarily result in less of it. If the government starts taxing your employment income at a higher rate, you might work more or you might work less, depending on whether the income or the substitution effect is greater. Economics, bro.

RMB OK, when have increasing rates increased the activity. I suggest you read Economics in One Lesson by Henry Hazlitt.

RMB Liberals are pro-choice on abortion. I guess that's the only aspect of health care in which choice is allowed.

JSM I think grandpa needs a nap.

RMB It’s sad when you feel the need to resort to personal insults.

[_The Nehor]

All UHC systems deny coverage as well. Not only that, they deny access.

No, they don't. Britain has it's own National Healthcare but you can choose not to participate in it and get private medical care.

[_JohnStuartMill]

RMB If the costs are not felt by the user, the demand is higher than if he/she pays it. Obamacare will make this worse.

This would be a much stronger point if people wouldn't have to buy the federal plan to be covered by it. Remember that subsidies for health insurance exist even now, so Obama's plan wouldn't change that.

JSM Is this because per capita costs of Medicare have gone up astronomically, or is it because lawmakers in 1966 didn't anticipate the lengthening of life expectancy that led Medicare to enroll many more Americans? If the 1966 House thought that in 1990, Medicare would cover 10 million Americans, and it instead covered 50 million, then the increase in cost is not so surprising. So saying that Medicare's total costs increased by more than expected doesn't really get you anywhere.

RMB Utilization was much greater than the estimate. You give something away and the demand often exceeds expectations. Especially when the cost is nine times what was expected. Guess what, the cost of Obamacare will exceed the estimate and liberals will be SHOCKED SHOCKED.

You didn't address my point at all. Also, your second sentence here doesn't really apply, because people would normally have to buy the federal plan.

RMB A conservative estimate is one at the high end of the cost estimates. I’m the chief actuary at a multi-billion dollar asset company and that’s how we use the term.

Well, the term has a different meaning in ordinary language. If you were using a technical sense of the term, you probably should have said so.

JSM But you're missing the most important point, which is: how does the increase in the cost of Medicare, per capita, compare with the increase in the cost of a typical private health insurance plan? Those comparisons aren't favorable to your position.

RMB Medicare is being subsidized by private insurance as its reimbursement rates have decreased. Obama’s brilliant solution is to kill private insurance. Where will the subsidy for Medicare come from when private insurance is no more.

Read what you responded to, then re-read your response. See how your response doesn't say anything against my point?

JSM Yes, subsidizing an activity usually results in more of it. But moral hazard exists in all insurance schemes, not just those run by the government. It's inherent in insurance, period.

RMB Yes, but private insurance companies don’t have printing presses. Subsidies from the government make it worse.

I can't tell what kind of argument you're making here, so I'll give you an opportunity to clarify.

JSM Taxing an activity doesn't necessarily result in less of it. If the government starts taxing your employment income at a higher rate, you might work more or you might work less, depending on whether the income or the substitution effect is greater. Economics, bro.

RMB OK, when have increasing rates increased the activity. I suggest you read Economics in One Lesson by Henry Hazlitt.

Referring me to a pop economics text is not likely to dissuade me from believing something I was taught during my formal economics education. But as long as we're consulting Internet resources, try the Encyclopedia Britannica's entry for the income effect:

It is difficult to determine the extent to which an income tax reduces the incentive to work. To the extent that the tax reduces total income after taxes, it may lead some persons to work longer in an effort to maintain an established standard of living (the income effect).

I thought you were a badass actuary?

RMB Liberals are pro-choice on abortion. I guess that's the only aspect of health care in which choice is allowed.

JSM I think grandpa needs a nap.

RMB It’s sad when you feel the need to resort to personal insults.

It is sad when people feel a need to resort to personal insults. Oh, and who initiated that in this thread, by the way?

[_Brackite]

Don't pay for health care reform on the backs of our seniors.


From FactCheck.org:

...

Incredible Shrinking Benefits?

After celebrating the accomplishments of older Americans, the narrator gets straight to the scary stuff: "Congress plans to pay for health care reform by cutting $500 billion from Medicare." The ad doesn’t mention that the $500 billion is a gross figure that counts only proposed cuts while ignoring any increases, including a big increase the bill proposes in projected payments to doctors. The nonpartisan Congressional Budget Office has estimated that the House bill would result in "savings" of $219 billion after all increases and decreases are netted out. The House bill would trim projected increases in payments for hospitals, insurance companies, pharmaceutical companies and others, including home health care providers and suppliers of motor-driven wheelchairs. But it also proposes what CBO estimates is a $245 billion increase in spending for doctors, by canceling a scheduled 21 percent cut in physician payments.

...

We can’t resist noting that Democrats are getting a taste of their own medicine here. Late in the 2008 campaign, Republican presidential nominee John McCain’s advisers spoke of holding down the rise in future Medicare costs to pay for part of his health care proposals. Although a McCain aide was quoted as saying no cuts were being proposed in benefit levels, the Obama campaign ran two ads falsely accusing McCain of proposing benefit cuts. One said McCain’s plan "means a 22 percent cut in benefits. … Nursing home care could suffer and so could your choice of doctor." The other said seniors would "receive fewer services, and get lower quality care." We called Obama’s claims against McCain "bogus" and "false" and also an example of "Senior Scare." The same now goes for 60 Plus’ claims against Obama’s plan.

...

Link: http://www.factcheck.org/2009/08/more-senior-scare/


Now, Both The left and the right are basically guilty of unnecessary scaring the American senior citizens.